China: the silver lining in Alibaba's cloud computing market strategy
Domestic alliances will help Alibaba's cloud unit Aliyun gain experience before challenging market leaders Amazon, Microsoft and Google.
E-commerce giant Alibaba Group is an underdog in the global cloud computing industry, but it has one thing going for it: it's Chinese.
Alibaba this week scored a minor deal with the northeastern port city of Dalian to build a cloud computing centre and provide online government services such as bill payment.
The pact is a small part of a growing portfolio of similar cloud services tie-ups between Alibaba and government bodies around China and comes against a backdrop of Beijing's deepening paranoia about foreign technology.
The domestic alliances will help Alibaba's cloud unit Aliyun, literally "Ali Cloud", gain experience before any global campaign to challenge market leaders Amazon, Microsoft and Google.
"Basically, they are following the political trends and they're grabbing the business opportunities that result," said James McGregor, at US communications consultancy Apco Worldwide.
"China wants control of its information, of its data, of its news, of its technology food chain, and so there are huge opportunities."
The sector has boomed as it has become cheaper for companies to store data on remote servers, or in the cloud, rather than maintaining servers in-house.